Investment opportunities in Iran are "too big to ignore," as the country's president signs a new series of deals on the second leg of his European tour, the CEO of a top investment firm told CNBC.

Formal announcements of Iran's 100-plane order from Airbus were made this morning, alongside plans for a production tie-up between carmakers Peugeot and Iran Khodro. The deals add to the billions worth of agreements secured by Iranian President Hassan Rouhani in Italy earlier this week as he attempts to drum up investment across the continent.

With sanctions lifted, investors are about to gain access to a middle-income country with a highly educated and cheap labor force, and a population topping 80 million, Clemente Capello, the founder and CEO of frontier and emerging market investment management firm Sturgeon Capital, explained.

But those opportunities extend beyond big business tie-ups, he explained.

Capello, who has developed Sturgeon Capital's Iranian fund, says Iranian equities are going for cheap, at a price to earnings ratio (P/E) of about five, where most mainstream market stocks are bought at 15 to 20 times P/E. Similarly, dividend yields are totaling around 15 percent, compared to 3 to 4 percent in established markets.

Atta Kenare | AFP | Getty Images

Iranian President Hassan Rouhani.

While the country's 25 percent deposit rate has muted local stock demand, that's all about to change.

"It's what everyone is ignoring, this is the single biggest catalyst," he said.

Interest rates are expected about to fall by a "massive 10 percent" over the next 18 months, Capello said, and will be a key driver to valuation. Capital costs will drop, and earnings will rise as credit becomes cheaper and more readily accessible, he explained.

But like any frontier or emerging market, Capello said investors need to be wary of value traps, and make sure that stockholders are aligned with investors.

"(There are) are lots of large conglomerates who don't really care about the share price," he warned.